CORAZON MINING LIMITED — Interim / Quarterly Report 2007

Oct 28, 2007

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QUARTERLY REPORT FOR THE PERIOD ENDING 30 SEPTEMBER 2007

Highlights

• Strong copper and gold results from Yanco Glen

  • gold up to 2.37g/t, copper up to 14.2% and silver at 74g/t

• Joint Venture Concluded for Wertago

• Exploration Activities Commence for Copper Ridge

• Option Underwriter Appointed and Placement to Sophisticated Investors Complete

• Appointment of Senior BHP Billiton Geologist as Exploration Manager

PROJECTS

Yanco Glen (Graynic 100%)

The Company received positive rock chip sample results from the Yanco Glen project in New South Wales. While only limited sampling was conducted along the historic Anaconda mine workings, results are encouraging, with gold recording between 1.9g/t and 2.37g/t and copper between 1.22% and 13.60%. Graynic has now completed a soil sampling project for this prospect and results will be released when they are available.

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Graynic Metals Limited ACN : 112 898 825 ASX:GYN

Suite 5, Level 1, 350 Hay St, Subiaco, Western Australia, 6008. PO Box 935, West Perth, WA, 6872 Phone: 08 6364 0518 Fax: 08 6210 1872

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Copper Ridge (Graynic 100%)

The company recently completed a geochemical and rock-chip sampling program at the Copper Ridge project located 75 km north north-east of Broken Hill in eastern New South Wales. The project represents a virgin copper occurrence by modern exploration standards as the lease has never been held as an exploration license. There has been no drilling or any other work conducted on the lease since historic mining activities around 125 years ago. Copper Ridge represents an exciting target for the Company and results of the current program should be available early November 2007.

Wertago (Graynic 100%)

Graynic Metals Limited recently concluded a Farm-In and Joint Venture Agreement (“Agreement”) with Proto Resources and Investments Limited (“Proto”) (ASX Code: PRW) relating to Graynic’s Wertago prospect in NSW.

The Wertago prospect is located 170 km north-east of Broken Hill in eastern New South Wales. The prospect contains historic copper mines of the Wertago Copper Field, and the Nutherungie Silver fields and is located along strike from Black Range’s Grasmere project.

Under the terms of the Farm-In and Joint Venture agreement, Graynic will grant to Proto the exclusive rights to explore the Wertago prospect and Proto shall be entitled to earn up to an 80% interest in the Wertago prospect by spending a minimum of $1 million on exploration on the tenements within 42 months from the commencement date of the agreement. The agreement has been structured in three phases, and also allows for the issue of a minimum of 500,000 in Proto shares to Graynic.

Under the first phase of the agreement, Proto will be obliged to spend a minimum of $150,000 within six months of the commencement of the Agreement, which would include assessment and interpretation of airborne EM; design, collection and interpretation of ground EM follow up; and geochemistry over a number of historical prospects and/or EM anomalies. Proto is able to withdraw from the Agreement at the completion of the first phase with no beneficial interest being transferred from Graynic to Proto.

As part of the second phase, Proto commits to a minimum exploration investment commitment of $350,000 and a maximum exploration investment commitment of $500,000 over an 18 month period to earn a 60% interest in the Wertago prospect. At the completion of Phase Two any unused funds above $350,000 would be paid to Graynic as shares up to the maximum $500,000 amount.

As part of the third phase, Proto will furthermore commit to $500,000 of exploration investment expenditure within 18 months to earn 80% of the project and will issue Graynic with an additional 500,000 shares at completion of this phase.

Proto will act as Joint Venture Manager and have responsibility for design, implementation and interpretation of surveys and work programs during this time, including any land access negotiations or other requirements.

Graynic Metals Limited ACN : 112 898 825 ASX:GYN

Suite 5, Level 1, 350 Hay St, Subiaco, Western Australia, 6008. PO Box 935, West Perth, WA, 6872 Phone: 08 6364 0518 Fax: 08 6210 1872

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CORPORATE

Option Underwriting and Placement

Graynic’s cash position has been secured with the appointment of Indian Ocean Capital Pty Ltd as underwriters for the current option conversion programme. In addition, Graynic reached agreement with Indian Ocean Capital Pty Ltd for the placement of an additional three million (3 million) shares at $0.20 (20 cents) to Indian Ocean Capital Pty Ltd for a total sum of $600,000. The above will ensure that Graynic will have $3 million with which to progress its current exploration projects. Graynic welcomes the support of Indian Ocean Capital as it looks to progress its current exploration and drilling programmes in WA and NSW.

Appointment of Exploration Manager

Graynic has recently appointed Mark Fletcher as Exploration Manager. Mark is a qualified geologist with over fifteen years experience in the mining and exploration industry with BHP Billiton and WMC Resources Ltd. Mark was most recently the Project Leader – Base Metal and Bulk Commodities , Australia South Asia Region for BHP Billiton Minerals Exploration Division. He has been responsible for the successful nickel discoveries at the Collurabbie Project, Western Australia and various mineralised bodies close to the Mt Keith deposit, as well as base metal exploration activities at Olympic Dam. The Board of Graynic is delighted to welcome Mark to the Graynic team and looks forward to working with him on Graynic’s existing projects, as well as the identification of further potential projects for the Company.

Enquiries: Bronwyn Barnes Managing Director 08 6364 0518 0417 093 256

About Graynic Metals Limited

Graynic Metals Ltd is committed to increasing shareholder wealth through the acquisition, exploration and development of base metal mineral resources throughout Australia. The Company has key project areas in Western Australia and New South Wales within mineral provinces that have demonstrated copper, lead, zinc, nickel and gold mineralisation.

Current exploration targets include locating additional high grade resources adjacent to existing resources, testing of historic workings, drill testing of significant surface geochemical anomalies and the drilling of obvious strike and depth extensions of existing anomalous drilling intersections. Each project area has a significant land position which allows for further growth opportunities should exploration be successful.

Graynic Metals Limited ACN : 112 898 825 ASX:GYN

Suite 5, Level 1, 350 Hay St, Subiaco, Western Australia, 6008. PO Box 935, West Perth, WA, 6872 Phone: 08 6364 0518 Fax: 08 6210 1872